Holiday chaos avoided as Monarch handed two-week lifeline

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Atol protection offers customers guarantees that should the company they booked travel through go bust, they will not be stranded overseas and will not lose out financially. Every company in the UK which sells holidays which involve air travel or standalone flights has to have an Atol license and the CAA only issue them to firms they believe are solvent.

Monarch's new temporary permit will run until 12 October. In a statement, the air travel regulator said: "The CAA was able to do this by requiring the shareholder to provide additional funding ... Monarch now has 12 days to satisfy the CAA that the group is able to meet the requirements of a full Atol license.

"During this period of extension, the CAA will continue to monitor the company."